Toll Brothers (TOL) Q1 Earnings Preview: What You Should Know Beyond the Headline Estimates

Core Viewpoint - The upcoming earnings report for Toll Brothers (TOL) is expected to show a decline in quarterly earnings and revenues compared to the previous year, indicating potential challenges for the company in the current market environment [1]. Financial Performance - Quarterly earnings are projected at $1.99 per share, reflecting an 11.6% decrease year over year [1]. - Revenue estimates stand at $1.9 billion, which is a 2.6% decline compared to the same period last year [1]. Earnings Estimates and Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a stable outlook from analysts despite the anticipated decline [1][2]. - Revisions to earnings estimates are crucial for predicting investor actions, as they correlate strongly with short-term stock performance [2]. Key Metrics Forecast - 'Revenues- Home Sales' are estimated at $1.88 billion, down 2.5% year over year [4]. - 'Revenues- Land Sales' are projected to reach $27.45 million, showing a significant increase of 71.4% year over year [4]. - 'Backlog - Units' is expected to be 6,440, down from 6,693 in the same quarter last year [4]. Pricing and Contracts - The 'Average delivered price (Total Average Price Per Unit)' is forecasted at $936.51, down from $1,002.50 in the previous year [5]. - 'Net contracts - Units' are estimated at 2,455, compared to 2,042 a year ago [5]. Delivery and Backlog Insights - 'Closed/Delivered - Units' are expected to be 2,008, an increase from 1,927 in the same quarter last year [6]. - The 'Average Backlog Price' is projected at $1,057.16, slightly down from $1,058 a year ago [6]. - The 'Number of Selling Communities' is expected to reach 410, up from 377 in the previous year [6]. Margin and Value Estimates - 'Backlog - Value' is estimated at $6.89 billion, down from $7.08 billion year over year [7]. - 'Gross Margin- Home Sales' is projected at $468.29 million, compared to $532.61 million last year [7]. - 'Gross Margin- Land Sales and Other' is expected to be $5.28 million, down from $5.85 million year over year [7]. Market Performance - Over the past month, Toll Brothers shares have declined by 4.5%, contrasting with a 4.3% increase in the Zacks S&P 500 composite [8]. - The company holds a Zacks Rank 4 (Sell), suggesting it may underperform the overall market in the near term [8].